September 1, 2016: Vol. 28, Number 8

From the Current Issue

Earlier this year, on June 27, Alvin Toffler died. For those few of you who’ve never heard of him, Toffler released a seminal and oddly prophetic tome called Future Shock in 1970. In that work, he coined the term “information overload” — an experience with which we’ve all become intimately familiar today, 46 years later.

A number of managers enjoyed double-digit growth in AUM during the past year, according to Global Investment Managers 2016, an annual survey and report produced by Property Funds Research and Institutional Real Estate, Inc.

Listed equity REITs had the highest net total returns between 1988 and 2014, but levels were low during the survey period, according to a study by CEM Benchmarking, an independent provider of benchmarking information for institutional investors, sponsored by NAREIT.

CMBS issuance at the end of the second quarter is at its lowest level in four years. Furthermore, the CMBS delinquency rate rose for the fifth consecutive month in July, this time by 16 basis points, to 4.76 percent.

Strength in industrial and logistics markets throughout the Americas continued during second quarter 2016, according to CBRE. The U.S. vacancy rate and availability rate both dropped by 20 basis points to 5.2 percent and 8.7 percent, respectively.

The fundraising market may be slowing after a 2015 total in excess of $100 billion. And it appears it might be slowing more dramatically for mega-funds — those funds holding a final closing after raising $1 billion or more in commitments — than for smaller funds

Canada is home to some of the largest pension plans in the world, and they have outgrown their domestic real estate market. Although Canada’s real estate market is still full of opportunity, it is relatively small compared with markets in other countries, forcing Canada’s largest investors to look elsewhere.

While investors continue to increase allocations to commercial real estate this year, we have identified certain megatrends that yield nontraditional metrics for targeting growth opportunities and potential landmines long into the future.

The Sustainability Accounting Standards Board, or SASB, is an independent organization focused on developing and disseminating sustainability accounting standards. Bryan Esterly, who leads standards development for the infrastructure sector, was recently interviewed.

In second quarter 2016, the NCREIF Property Index, or NPI, crossed a milestone of one-half billion dollars in market value, with a total of $505.3 billion. The second quarter also marked the fifth consecutive quarter of a downward trend in total return.